May the Force be with You

Should you treat your indirect channel as if they were your salesforce? Sounds like it should be pretty obvious, but is this a trick question?

Most of you out there have some form of indirect business model, partners or distributors who sell your products. On the other hand, some of you sell entirely through others who represent your products to your customers. They are your salesforce. But, should you treat them as if they were your own salesforce?

I think the answer is yes, and no.

If they were your own salesforce, would you help them sell as best as they can? From this perspective I believe the answer is yes. Help them sell just like you would your own people. First, incent them by paying for performance, but ask them to comply with the rules of engagement. This is a no-brainer. Second, provide them product knowledge and training. I would like to think this is a no-brainer, but I know of some companies who could do better with this for their resellers. Third, provide them leads so they know toward whom best to expend selling efforts. You would do this for your own sales reps.

You mean you don’t send leads to your distributors? They get leads from you but you don’t qualify them – but would you qualify leads for your own reps? These people are your salesforce, why not send them the best leads possible? Improved lead quality translates into improved sales – is that not your objective even though the sales reps work for somebody else?

Finally, would you provide your own sales reps with analysis on what is working and what is not working, who is buying what products and who is not, where potential exists and where it is already penetrated? Do you provide that to your resellers? If you did they would sell more. So, treat your indirect channel like you would your own people if you want them to sell more.

Yet, again, this question of how to treat your resellers is complicated. You might not want to treat them completely like your own. For example, do you treat your sales reps with equality? This one is a little thorny. We treat employees with equality by law and also in principle. We want to give them all the same chance to be successful and they are mostly subject to the same remuneration policy (by country at least). However, your resellers are not individuals – they are organizations, and they are very much not equal. Don’t fall into the trap of thinking you need to treat them equally. Nice principle, bad outcome.

We give sales reps all the same product knowledge and training. You might choose to do this with your indirect channel, or you might not. It is possible that you might give your best training to your best partners, investing more in them than in others. Smaller, less capable partners may not pay back on the greater degree of investment.

Should you distribute leads in a fair and equitable manner? Absolutely not! Your highest producing resellers should get the best leads, as they have the best chance of converting them to sales. Do you give equal access to analytics to your different resellers? I wouldn’t. This should be distributed based on level of commitment – the highest get the most analysis.

What about compliance to the rules of engagement – should this be done with equality? The knee-jerk reaction is probably of course. Rather, I think this is an inverse relationship as compared to some of the other factors listed above. Rather than giving more compliance freedom to your best partners, make them play by more strict rules. For example, if they want to be in your top tier, receive the best margin and have the best access to leads and analysis, they also need to provide the best quality of information back: forecasting, lead quality feedback, pipeline information. The little guys may not be able to comply with this – especially if you are using CRM systems to capture the data. You do want your top producers, the 20% who make up the 80% of volume, to play by your rules. Why not? They are successful because of your products and your marketing and sales support efforts. They need to comply with the rules to subsidize that success.

Generally speaking, it is a good idea to segment your resellers based on capability and commitment. They may be able to work their way up the segmentation model, or they may be limited to a category that their abilities allow. Either way, these organizations are not equal and will work best for you if not treated with inappropriate equality. Companies that don’t have formal segmentation models tend to evolve informal systems that are less effective in their outcomes - best to acknowledge this and make the most of your segments.